How Fortunes Are Made

Owning a Master Franchise is the ultimate franchise opportunity. It provides numerous advantages over a standard franchise and yields multiple streams of income.

Royalty/Franchise Fee Advantage.

Assume you purchased a territory from a franchise company at a pre-determined amount.

Your agreement with the franchisor is that you would receive 50% of each franchise fee and 50% of the royalty income. Let’s assume that the franchise fee is $25,000 per unit and the royalty each unit pays is 6% of their gross sales. That means for each unit opened in your territory you would receive $12,500 (50% of the $25,000 franchise fee).

Let’s also assume that each unit opened in your territory has an average yearly gross sales volume of $1,000,000. Each unit would pay a royalty of 6% of their gross sales, which is $60,000 per year. You as the Master Franchisee would receive 50% of this amount which is $30,000 per unit per year.

If 10 to 100 units opened in your territory, your royalty income would be $300,000 to $3,000,000 per year. In addition you would have received an additional franchise fee income of $125,000 to $1,250,000.

The term of a Master Franchise agreement is typically for 20 to 30 years. Your income from franchise fees and royalties alone would be very substantial.

If your territory consisted of 100 units (with a 30 year term) you would have made over $90,000,000!

(This example is for explanation purposes only and not a guarantee)

Additionally, there are numerous other ways to generate income as a Master Franchisee besides receiving franchise fees and royalties.